An Oil Glut. How Did That Happen?

One advantage to being older is that you have lived more history than most other people alive. I remember when gasoline was 30 cents a gallon and cigarettes were 25 cents a pack. Well, times have changed. The 1973 Arab-Israeli War was a momentous event. My infantry company at Fort Hood, Texas, went on alert, as did the rest of the United States military forces. Oil became a bargaining chip. 

This The Daily podcast, The Glut of Oil, gives a historical perspective on how energy independence was such a big deal in the 1970s to the point when, last week, oil was worth less than a positive number. You had to pay someone to take the oil off your hands. Purchasing oil futures will do that to you. 

The challenge of shutting down wells is also addressed in the podcast. The last time I filled up on 87 octane regular gas here in Washington state, it was $2.09 a gallon. It was normally running a dollar more only two months ago. 

This yin and yang of commodity prices will likely be reflected in other areas of the economy, but oil is a biggie because it impacts so much of our industry and social community.